Canadian mineral exploration and development company, Mkango Resources, announced the results of a definitive feasibility study (DFS) completed for its Songwe Hill rare earth element (REE) project in south-eastern Malawi.

The DFS outlined an estimated CAPEX of US$277M for a conventional open-pit mine, processing and beneficiation plants, a tailings storage facility and other project-related infrastructure. At full capacity, during the first five years of operation, Songwe Hill is reported to produce 5,954tpy of total rare earth oxides (TREO).

Production from Songwe Hill will include 1,953tpy of neodymium and praseodymium oxides, and 56tpy of dysprosium and terbium oxides contained in a mixed rare earth carbonate (MREC) grading 55% TREO. The MREC will then be sent to Mkango’s Pulawy separation plant in Poland, for which a feasibility study is yet to be released. First production is scheduled to begin in February 2025, with full production by September 2025.

Creating an integrated ex-China supply chain in rare earths remains a key challenge, with all published critical material strategies identifying rare earths as one with a very high supply risk. Project Blue’s data shows that the majority of REE mined outside of China were also refined outside of China up until 2015. However, as mine supply has ramped up, MREC processing capacity has lagged and separation capacity even more so. As of 2021 and outside of China and Myanmar, less than one-quarter of REEs mined are also refined into separated products ready for downstream users, with the rest most likely feeding Chinese plants. While advancing projects get good press for rare earth diversification, and producing MREC is an attempt to increase revenues of mined REEs, these are currently the smaller pieces of the puzzle needed to diversify away from a Chinese rare earth supply chain.